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Use your gift card quickly … or it could become worthless

Not sure what to buy a loved one for Christmas? Gift cards and vouchers are often the solution, but this gesture can end up being more of a curse than a gift

Not sure what to buy a loved one for Christmas? Gift cards and vouchers are often the solution – a market worth £ 7 billion a year. But such a thoughtful gesture can end up being more of a curse than a gift.

Just ask Doug and Angela James. The couple, from East Sussex, had a ‘disturbing and annoying’ experience of spending money on their Vanilla gift cards.

These are prepaid gift cards that can be used wherever Mastercard is accepted. They can be bought in denominations up to £ 100 for a maximum of £ 4.95. They can also be used internationally, but with a 3 percent fee for foreign currency purchases.

Last year, £ 4.65 billion was spent on gift cards - cards usually work fine, but if something goes wrong money can be lost in the blink of an eye

Last year, £ 4.65 billion was spent on gift cards – cards usually work fine, but if something goes wrong money can be lost in the blink of an eye

Last year, Doug, 86, and Angela, 82, received eight such cards from their adult children as gifts for their diamond wedding anniversary. Each card was loaded with £ 100.

The original intention was to use the cards to pay for a riverboat cruise on the Danube in the spring of this year, but the coronavirus pandemic has thwarted this. Instead, they decided to use them to fund a staycation in Norfolk in September. At the end of their stay, Doug went to pay with the cards. But the first two card payments were declined and returned as ‘unauthorized’.

Doug called Vanilla’s customer service from the hotel, but the connection was lost after a short while. He tried to call back but got no answer. Doug ended up paying with his debit card.

At home, he spoke with several customer service representatives, providing photos of the signed backs of the cards, copies of the card’s receipts, and the ‘unauthorized’ receipts. As his complaint continued, Doug was told that he had too much money on the gift cards in total – and that access to the money was denied. To fix this, he would need to provide ID and whereabouts – and an explanation of why he had so many cards.

Doug says, “The clue to the problem with Vanilla gift cards is in the name. It is unlikely that the buyer of the card will be the user, who in turn will not be aware of the terms until later. ‘

Fortunately, after The Mail on Sunday intervened, the company refunded Doug the £ 800 card balance for the purchase cost (£ 39.60) and paid the £ 100 goodwill payment.

A spokesperson for InComm Payments, which manages Vanilla gift cards, says: “The high number of gift cards registered in this person’s account triggered an alert that temporarily blocked the money. Our customer service team has contacted Mr. James to resolve the situation. ‘

Last year, £ 4.65 billion was spent on gift cards. Most of the time, the cards work fine, but if something goes wrong, money can be lost in an instant.

This happens when stores go bankrupt, leaving out of pocket gift card holders with these retailers – and many retailers are in a precarious position this year.

Martyn James, of Consumer Complaints Service Resolver, says: “Before buying a gift card, think carefully about your choice of retailer. Even big brands have gone into administration and it can happen with little warning. ‘

Meanwhile, recipients often forget to spend their cash gift before the expiration date of the card. So-called ‘inactivity fees’ can also eat up the outstanding balances, while not all gift cards can be used to pay for online purchases, despite many stores currently being closed.

But if buyers think carefully before giving and recipients act quickly when they receive, consumers can avoid most of the pitfalls.

Good options include a multi-store gift card from One4All that can be issued at many different stores, bars and restaurants – or a special town and town gift card that supports local shopping.

A spokesperson for the Gift Card and Voucher Association said, “Gift cards are not a bottom drawer product – they’re there to spend and the sooner the better.”

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